Cramer Knows Best

CNBC stock forecaster proffers lively views on Baltimore-based sports teams and business scene

October 08, 2006|By Laura Smitherman | Laura Smitherman,Sun Reporter

Subversive on CNBC?

That's the word Jim Cramer uses to describe his Mad Money stock-picking show that ranks as the network's most-watched business program among 18- to 34-year-old viewers.

While Cramer may grab the most attention for biting the heads off little toy bulls made of foam as he dispenses financial advice, he says his show serves a deeper purpose. He says he's trying to help the average citizen living with a government that's "of, by and for the corporation" make a boatload of money from the stock market.

His is a kind of Marx-meets-Robin-Hood philosophy: "We are at a strange time for capitalism in our nation," he explains. "It's like if the poor are poorer, it's their own fault. I look at it differently. I say, well, I made a lot of money for rich people, so why don't I try to make a lot of money for people who aren't rich."

Cramer, 51, worked at Goldman Sachs & Co. before starting a hedge fund that returned 24 percent a year after fees over nearly 15 years. He left after the pressure became too great and says he understands now why people committed suicide after the 1929 stock market crash.

He started TheStreet.com and has written books such as You Got Screwed! Why Wall Street Tanked and How You Can Prosper. Now he is building his "Cramerica" franchise that also includes a radio show.

His boosters call him a genius. His critics say he's a blowhard. To decide for yourself, you can track his stock picks on TheStreet. There's also an unaffiliated Web site, CramerWatch.org, which pits him against Leonard, a monkey that picks stocks by flipping a coin. Sometimes, Leonard wins.

Last week, Cramer taped his TV show at Georgetown University as part of his Back to School tour, and a reporter for The Sun sat down with him for lunch. Below are excerpts from the interview, including his take on companies based in Baltimore, his own mind, and whether he would buy the Orioles.

As the audience and callers to his show often scream, Boo-yah! Cramer on Mad Money:

It appears on the show that you must have some sort of photographic memory for stocks?

I'm kind of an idiot savant about the market.

I wonder if someone on the set is talking in your ear?

I don't have an IFB [an earpiece for hearing producers off camera] because I don't want anyone to think anyone is whispering in my ear. The show has to be authentic. Look, it's a complete oddity. I clearly have a deficiency in my brain that works in favor of this but is obviously not working in favor of other things, so I'm going to take advantage of it. ... It's somewhat Rain Man-like.

So the show is live?

Oh yeah. I think one of the things that college kids might like about this is the authenticity of it as distinguished by the fact that I make tons of mistakes, like when it's going I do silly things and no one knows where I'm going to go, including me. ... It's kind of a rush; it's kind of a head case. It's kind of like the Ravens. That's a head-case team.

Are you surprised by the success of the show?

Yeah, I'm kind of shocked about it in the sense that people ask me for my autograph and have their picture taken with me. At my hotel, people heard obviously that I was staying there, and they showed up with books for me to sign in the lobby. Cramer on investing:

What do you tell individual investors?

I always say if you have less than $10,000, you really should be in a mutual fund. You really shouldn't be winging it. ... But if you do have the time and inclination, I think you can beat most money managers.

How would you describe your style of investing?

Eclectic.

Are you a growth investor, a value investor?

Those are to trick people into putting money with you.

Investors are often told to buy and hold stocks, and critics say your show encourages too much trading. What do you say?

Commissions are incredibly low. The information is all available on the Web. Taxes are outrageously low versus what they should be. ... Anybody who set up a philosophy that says trading is bad is not looking at the fundamental structural changes in both the tax code and the technology behind the industry. I think they're being reckless with "buy and hold." They think that I'm being reckless. I think that I'm being prudent. Cramer on sports:

What you would do if you weren't doing this?

If I wasn't involved in finance, I'd be tempted to buy a sports team. I think that would be really great.

You know Baltimoreans often wonder whether the Orioles are for sale.

I would need a consortium to buy the Orioles. It's an expensive franchise.

Well, the rumor is that Bill Miller, a star money manager at Legg Mason, is interested.

Good for him. I tried to put together a consortium to buy the Phillies a few years ago. But you know I'm not as wealthy as these guys. These guys really have a lot of money. (Reporter's note: Cramer is reportedly worth as much as $100 million.) Cramer on Baltimore companies in our version of Mad Money's Lightning Round where he gives off-the-cuff views on stocks:

Legg Mason Inc.?

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